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Malaysia’s rural SMEs get help via e-commerce hubs

Malaysia’s interim Prime Minister Mahathir Mohamad continues forward, despite political turbulence, by launching efforts to help micro, small and medium enterprises (SMEs), particularly those in rural areas, with their digital transformation.

In the latest instalment, Mohamad earmarked US$4.72 million to speed up the adoption rate of digital solutions among rural SMEs. This move will be channelled to the Malaysia Digital Economy Corp (MDEC).

The fund is a part of a recently launched Economic Stimulus Package 2020 that has been designed to invigorate the country’s economy and prepare it for any impact resulting from the COVID-19 outbreak.

MDEC use the fund to further empower the Perkhidmatan e-Dagang Setempat (PeDAS) transformation program that will be focusing on modernizing and digitizing rural internet centres. The aim is to turn those internet centres into e-commerce hubs.

By establishing these hubs, rural SMEs can expand the prospects of their business by exploring market opportunities that e-commerce has to offer.

The PeDAS program, in fact, was launched with the sole aim of helping rural MSMEs learn how to reach a bigger consumer base through e-commerce platforms.

The program has been instrumental even before the additional US$4.72 million boost.

At these rural internet centres, SMEs are encouraged to hone their skills to gain the right digital, entrepreneurial and e-commerce skills.

In addition, SMEs have access to various digital tools and business application platforms that can help them deliver value to their businesses.

The new fund aims to also help SMEs get a head-start in going digital and augment their operations to be better in-line with the standards of an e-commerce marketplace.

This would also mean that rural SMEs will be facilitated in building a proper business foundation for themselves using integrated operational systems.

From licensing to branding and digital marketing, these businesses will receive all the necessary support to help them step into the e-retail industry confidently.

Additionally, 10,000 entrepreneurs will be eligible to receive RM1000 worth of grants to bolster their e-commerce promotion efforts.

Having more products enter the e-commerce market will not only propel the digital economy but it will also fast-track the process of establishing the nation as an online retail hub that is renown in Asia.

These initiatives reflect how committed and dedicated the government is to transform local businesses and drive change at all social-economic levels.

Clearly, there is a holistic understanding of how local rural businesses must not be left out when pursuing nationwide transformation projects.

After all, these businesses are the ones that will be enticing rural communities to participate in fueling the digital economy.

E-Commerce – a key contributor to the growth of the digital economy

OpenGov Asia earlier reported the digital economy contributed 18.5% to Malaysia’s economy in 2018, amounting to RM267.7 billion in the gross domestic product (GDP).

The e-commerce sector accounts for 43% of the digital economy’s value, contributing RM115.5 billion in revenue. With a forecasted growth rate of more than 20%, this sum could reach RM170 billion by the end of 2020.

Currently, the growth of the Malaysian e-commerce sector depends on a large segment of active mobile users.

In 2019, 91% of internet users in Malaysia searched online for a product or service to buy, and 88% visited an online retail store in their purchasing journey.

Thus, help all types of business in Malaysia, particularly SMEs, go digital will be a key factor in growing the nations digital economy.


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